Dear John: I am looking to purchase a studio apartment for $107,000 in cash. I have no outstanding debts and an excellent credit score of 850 to 900. I’m a single, 47-year-old woman, and my annual salary is $102,000. Would it be better for me to purchase the studio for cash or with a mortgage? K.Y.

Dear K.Y.: That depends, I guess, on where you want to live. It’s not likely that you can find a studio in the New York City area for that price.

If you don’t mind commuting in from one of the further suburbs, then you can probably find something that you can afford. But buying a piece of real estate for cash, I hope you understand, would put you in an unusually small group. Most people get a mortgage for real estate.

I asked Clifford Michaels, the president-elect of the Financial Planning Association of New York, to work out some numbers for you. “With an excellent credit rating of 850 you can easily obtain good terms on a mortgage,” Michaels said. “A good rule of thumb is that housing costs should be no more than 28 percent of your gross income, which in your case is a maximum of $2,380 a month.”

If you put down 20 percent on the studio, or $21,400, and get a mortgage for $85,600, at 6 percent a year for 15 years, your monthly payment would be $722 a month, Michaels says.

“This payment is affordable for you, and even with a maintenance payment added to your mortgage you will be within the 28 percent rule and using leverage to acquire an asset,” he says.

“Also, the interest payments on the mortgage and some of the tax built into your maintenance payment will be deductible on your tax return,” adds Michaels.

You could, of course, borrow more. Or put more money down and borrow the same $85,600 if you happen to find a place you like that costs a little more.

There’s one other thing you must consider. Real estate prices are coming down quickly in most parts of the country. But in the New York City area, prices have stayed fairly stable thanks to a larger number of foreign buyers taking advantage of our weak currency.